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Mondragon: A path to 21st century socialism?

By Louis
Proyect

October 11,
2010 -- On day five of Carl Davidson's visit to Mondragon, he alludes to a
transition to a "Third Wave" future by the Basque cooperative. The
Fagor pressure cookers might be phased out in favour of "the high-design
and high-touch products of a third wave future in a knowledge economy". In
order to succeed in this new business, Mondragon would have to develop
"new entrepreneurs", according to Isabel Uriberen Tesia, a Mexican on
the Mondragon staff.

Davidson
has been committed to the Third Wave since 1997 when he launched an online
magazine (now defunct) called cy.Rev.
Back then I took exception (http://www.columbia.edu/~lnp3/mydocs/computers/cyrev.htm)
to some of its major themes, especially the idea of a "third wave"
popularised by futurists Alvin and Heidi Toffler, as well as Republican Party
leader Newt Gingrich. I summarised the Third Wave as follows:

Put simply, the theory states that
there are three important "waves" in social history: (1) rural
societies based on agriculture, (2) urban societies that emerged with the
industrial revolution, and (3) the information-based world in which we
currently reside. The United States is in the throes of this third
microchip-inspired wave. Most of its difficulties are the fault of its
inability to migrate smoothly out of the "Second Wave" of dying
smokestack industries into the promised land of computer networks and
knowledge-based industries.

Davidson
was also impressed with the ideas of Clinton administration economist Robert
Reich, who insisted that an "information revolution" would be the
source of new jobs. He wrote:

Reich makes a convincing case that
it is both impossible and reactionary to try to prevent the globalization of
the market. Instead, he poses a strategic question: Rather than trying to
prevent low-wage, low-skill jobs from leaving the United States, why don't we
try a policy that would encourage high-wage, high-skill jobs to come into the
U.S., regardless of the nationalities of the investors.

Doug
Henwood was sceptical of such claims at the time. In a review of James Brook
and Iain Boal's Resisting the Virtual
Life, Henwood questioned Reich's assumptions:

Is there any truth to Reich's ...
blather? How big is the high-tech, infobahn workforce now, and how big is it
likely to get? The share of the workforce employed directly in information
superhighway kinds of tasks is well under 2% -- and that includes people who design,
make, and program computers, chips, and telecommunications equipment. Business
purchases of computer and telecommunications equipment totals just over 2% of
GDP.

Government labor reports released
this year, including the most recent one, present a tableau of shrinking
opportunities in high-skill fields.

Job growth in fields like computer systems
design and Internet publishing has been slow in the last year. Employment in
areas like data processing and software publishing has actually fallen.
Additionally, computer scientists, systems analysts and computer programmers
all had unemployment rates of around 6 percent in the second quarter of this
year.

More
troubling, however, was the spirit of entrepreneurialism that Davidson's
magazine embraced with even more passion than Ms. Tesia:

In our view of socialism, we affirm
the entrepreneurial spirit, the motivating energy of the market and the right
of individuals to become wealthy through the private ownership of the capital
they have helped to create.

In the
light of today's intractable economic crisis that has made terms like "the
entrepreneurial spirit" sound positively obscene, it must be understood
that the mid-1990s were a period of a deep reaction against the Soviet model
that had just imploded. There was a widespread reaction against the planned
economy that helped make the ideas of "market socialism" attractive
to many. And just as the Soviet Union in the 1920s served as a beacon for
revolutionary socialists, so did Mondragon represent a vindication of the
beliefs of market socialists. It was proof that the workers could run things on
their own—more humanely than the capitalists even in the pursuit of profits.

It was
never very clear in market socialist literature what exact purpose cooperatives
would serve. There could be no objection to the idea that they serve as proof
that the workers can run things themselves. In the 1864 Inaugural Address of
the International Working Men’s Association, Karl Marx referred to them as follows:

We speak of the co-operative
movement, especially the co-operative factories raised by the unassisted
efforts of a few bold “hands”. The value of these great social experiments
cannot be overrated. By deed instead of by argument, they have shown that
production on a large scale, and in accord with the behests of modern science,
may be carried on without the existence of a class of masters employing a class
of hands; that to bear fruit, the means of labor need not be monopolized as a
means of dominion over, and of extortion against, the laboring man himself; and
that, like slave labor, like serf labor, hired labor is but a transitory and
inferior form, destined to disappear before associated labor plying its toil
with a willing hand, a ready mind, and a joyous heart. In England, the seeds of
the co-operative system were sown by Robert Owen; the workingmen’s experiments
tried on the Continent were, in fact, the practical upshot of the theories, not
invented, but loudly proclaimed, in 1848. -- http://www.marxists.org/archive/marx/works/1864/10/27.htm

But there's
also a tendency for market socialists to view cooperatives functioning in the
same manner as handicraft manufacturing in the later stages of feudalism, as a
kind of inkblot that would spread until it engulfed and overcame the dying
system. In an article titled "21st Century Socialism", Davidson's
notion of a transition to socialism seems based on this model:

Socialism will be anchored in public
and worker ownership of the main productive forces and natural resources. This
can be achieved by various means: a) buying out major failing corporations at
penny stock status, then leasing them back to the unions and having the workers
in each firm—one worker, one vote—run them, b) workers directly taking
ownership and control over failed and abandoned factories, c) eminent domain
seizures of resources and factories, with compensation, otherwise required for
the public good, and d) public funding for startups of worker-owned cooperative
businesses. -- http://www.zcommunications.org/eleven-talking-points-on-21st-century-socialism-by-carl-davidson

This is why
he has greeted United Steel Workers union president Leo Girard's partnership with
Mondragon with such enthusiasm. It would appear to fulfill at least one part of
this schema, namely buying out major failing corporations and turning them into
cooperatives. One might of course question whether Girard would be better off
fighting on behalf of workers politically rather than getting sidetracked in
such reclamation projects. A principal obstacle to socialism in the United
States today is the same as it has always been, a willingness of the trade
union bureaucracy to support the capitalist onslaught on jobs and working
conditions in exchange for privileges enjoyed by the trade union aristocracy.

Finally,
turning to the question of Mondragon itself. While nobody can gainsay the
importance of a major business being owned and operated collectively by the
workers, there are real questions about how this relates to socialism. There
has only been one book critical of Mondragon from the left — Sharryn Kasmir’s The
Myth of Mondragon — and it is
essential reading for those trying to understand both sides of the debate.

To begin
with, cooperatives have existed under governments completely hostile to
socialism. In fact, in 1965 the fascist regime in Spain awarded Father
Arizmendiaretta , the founder of Mondragon, with the Gold Medal for Merit in
Work.

It turns
out that worker-owned businesses have not exactly been anathema to fascist
regimes. Indeed, Kasmir makes the case that if political parties and trade
unions had been legal under Franco, “political energies never would have been
channeled into so unlikely a project as cooperativism”.

And it was
not just Spain. While the Italian fascists were initially hostile to co-ops,
they got the green light from Mussolini after agreeing to purge Socialists and
Communists. In 1927 there were 7131 co-ops and by 1942 the number had swelled
to 14,576. Somehow the fascist state did not fear that these “alternative”
modes of production threatened the economic system.

Indeed,
Mussolini pointed to the co-ops as examples of his corporatist ideals. Kasmir
explains this anomaly in terms of how they “embodied worker participation,
nonconflictual relations between labor and management, and the withering away
of class identifications.” In the fascist system, as well as in Father
Arizmendiaretta's Christian-based beliefs, the class struggle is anathema. Joxe
Aruzmendi, Arizmendiaretta’s biographer, characterised the priest’s views as
follows:

At the root of the class struggle
can be found the myth of revolution, faith in violence, etc., that in the
opinion of Arizmendiaretta characterize the twentieth century, and that he
summarily rejects. The question of the class struggle is phrased, for Arizmendiaretta,
as the question of how to overcome it, urgently.

A visit to
the Mondragon website will reveal nothing about the class struggle, especially
the pitched battles taking place in Spain between the trade unions and the
social-democratic government. You will also find nothing about the movement to
defend immigrant rights. Or anything about ecology, peace and the rights of
national minorities, including the Basque people. For Mondragon, social justice
is co-equivalent with the cooperative's ambitions and nothing else matters for
much. Even Davidson reports: “Frankly, Basque youth aren't all that active
inside the coops. They're into third world global justice issues,
environmentalism in general, and Basque nationalism."

Those sorts
of issues, of course, have much more to do with our socialist future than the
spectacular rise of Mondragon as one of Spain's commercial powerhouses. Those
are the sorts of people that will reinvigorate our movement, not those with a
flair for finding new markets for high technology products especially in a
period when such markets are collapsing all around us.